Some smaller carriers are introducing payment plans meant to bring down the up-front costs of high-end handsets like the iPhone. Cricket, for instance, is letting customers pay $105 to walk out the door with an iPhone 5.

If you’re looking to pay less per month for a smartphone than the major wireless carriers are charging, prepaid carriers provide plenty of options.

The problem, until now, has been the high up-front cost of getting a really good smartphone without a contract. It can be hard to stomach the idea of a $650 iPhone, even if it costs less in the long run than buying a $200 subsidized one from a major carrier.

So now, according to a report by Fierce Wireless, some smaller carriers are introducing payment plans meant to bring down the up-front costs of high-end handsets like the iPhone.

Cricket, for instance, is letting customers pay $105 to walk out the door with an iPhone 5–a cost that includes one month of service–with a loan from Progressive Finance. That’s $395 cheaper than what Cricket usually charges, and there’s no interest for customers who pay off the loan within 90 days. (With interest, customers have nine months to pay off the phone in full.) Cricket’s wireless plan for the iPhone costs $55 per month with unlimited voice and messaging and 2.5 GB of full-speed data. A comparable postpaid plan on Verizon Wireless would cost $100 per month.

Cricket is advertising its financing plans in “select markets” now, and plans to expand that advertising early next year. MetroPCS also offers payment plans, but Fierce Wireless says the carrier wouldn’t disclose details.

These plans do have their own drawbacks. While prepaid plans technically don’t involve contracts, you’re still on the hook to pay off the phone no matter what. Considering that a payment plan would also raise your monthly bill, you could be paying more per month than you would with a regular wireless carrier for a while. The big savings only start to roll in once the phone is paid off in full. Also, keep in mind that with regional carriers like Cricket and MetroPCS, roaming fees can apply if you’re outside their coverage areas.

The payment plan concept isn’t strictly limited to smaller prepaid carriers. T-Mobile, the fourth-largest U.S. carrier, recently announced that it’s doing away with phone subsidies entirely, and will instead let customers pay in installments for phones on its Value Plans. Unlike Cricket, T-Mobile will require a two-year contract with these plans, but installments are drawn out over a 20-month period with no interest. Again, customers save money by sticking it out and paying a much lower monthly rate once their phones are paid off.

The risk for these companies is that the idea of taking out a loan or signing up for a payment plan might be just as frightening to customers as paying a high up-front cost. The subsidy model, while pricier, is also easier to understand. But at least the smaller carriers are providing other options, and finding new ways to offer better smartphones without charging full price.

I think it's a move in the right direction to fully exhaust Apple's potential iPhone 5 customer base in mature markets like the US. Eventually I think many more people will utilize regional carriers once they have their phone and want to lower their bills. For new people I am curious how much they are saving or is it actually costing more just in payments.

We saw an article the other day that Apple may develop a much cheape iPhone mini for emerging markets like India, Brazil, etc... This would rake them tons of dough were not everone already owns some type of smart phone. I think I read that over 50% of the US population that uses mobile phones has a smart phone which is incredible.

I wonder why all these retailers and carriers are giving the iPhone 5 ondiscount prices just a couple of months after it comes out. Is itbecause the demand is getting low or the rumors that the iPhone 5S is inproduction? is Apple killing its own product by coming out them themtoo soon? we at www.iphone5sreleasedate.com think so.